DENVER -- Colorado and Alaska are the only two states in the country not requiring regulation of mortgage brokers. That means anyone can call themselves a mortgage broker and gain access to your most critical financial information, including a four-time felon.

In a hidden camera investigation, 7NEWS caught mortgage broker Wayne Martin giving our undercover producer a sales pitch.

"I've got a good standing with the state ... A lot of the brokers who were kicked out of places out east like Florida are migrating and landing here, and there's nothing to stop them," Martin said.

Martin believes he's talking to a prospective customer but he doesn't realize he's also talking in front of two hidden cameras.

When a 7NEWS producer asked, "They don't do background checks or anything, so how do you know you're not dealing with a crook?"

Martin responded, "You don't. Unfortunately, today, you don't."

"How many loans have you done in the past year?" the undercover producer asked.

"Four hundred," Martin said.

"You've done 400 loans in the past year? Firemark?" the producer asked.

"Firemark, yes. I've personally done about 225," Martin said.

"Do you have a criminal record?" the producer asked.

"No ... No criminal record," Martin said.

This moment crystallizes the risk Colorado residents must navigate in the uncharted world of mortgage brokers. During the past several years, 7NEWS investigators have exposed unethical and illegal practices of several mortgage brokers, the financial struggles of their victims and the unsuccessful plans, proposals and promises of state lawmakers.

Lending experts believe the additional risk inside Colorado's mortgage industry costs everyone in the state higher lending rates. The FBI's most recent figures rank the state eighth in mortgage fraud.

"It's incumbent upon anybody that's getting a home loan to be sure who it is they're dealing with," said Scott Meiklejohn, the executive director of the Colorado Association of Mortgage Brokers, a trade organization with no regulatory authority.

"If we asked a mortgage broker if he had a criminal history and he lied to us, what would that say to you?" 7NEWS Investigator Tony Kovaleski asked.

"Don't use that mortgage broker, that's for sure," Meiklejohn said.

A few days after that morning meeting in front of our hidden cameras, 7NEWS returned to talk to Martin with the cameras rolling.

"He asked you about how many mortgages you've done in the last year. Do you remember what you said?" Kovaleski asked.

"I said that I've done hundreds," Martin said.

"I think you said 400, your company has done. Was that the truth?" Kovaleski asked.

"Probably not, no," Martin said.

"So you lied about that. How many have you really done?" Kovaleski asked.

"Probably 50," Martin said.

And that was not the only inconsistency in Martin's story.

"He asked you about your criminal history. Did you tell him the truth?" Kovaleski asked.

"I don't remember what I said to him," Martin said.

Criminal records uncovered by 7NEWS showed that the legal system convicted Martin of four financial felonies in three states. He served prison time in Arizona and Colorado.

"A criminal history in Arapahoe County -- a felony charge. And you lied to us about it?" Kovaleski asked. "Why lie about it?"

"It's no one's business but mine, sir," Martin said.

"I think there's many convicted felons operating in Colorado," Meiklejohn said.

All of Martin's felony convictions came before he was a mortgage broker in Colorado.

Legislation on its way to Gov. Bill Owens will require regulation for mortgage brokers and will likely prevent individuals such as Martin from working in Colorado and accessing your critical financial information.

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